The perceptions of retentions as held by clients, contractors and subcontractors

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Abstract

The payment mechanism of construction projects is different compared to other industries. For every payment made to a contractor or subcontractor a sum of money is held back. This deduction is a phenomenon peculiar to the construction industry and is known as retention. Retentions are held by both clients and contractors and as such involve the whole supply chain. However the effect the practice has on each party varies significantly as a result of which there have been debates regarding the practice. The purpose of this paper is to study the effects of retentions on clients, contractors and subcontractors. The author has conducted an extensive literature review to find out the issues around the practice of retentions and how it affects the parties involved. The impact of the practice on contractors, subcontractors and clients have been studied and analysed. The study is a part of a bigger research conducted which aims to investigate the practice of retentions in the NZ construction industry. It has been concluded that there seems to be an imbalance of power with regards to the retention practice and it is about time that some alternatives be put into place to make the practice fair for all parties.

Keywords

Retentions: Construction industry; New Zealand

Date

November 20, 2013

Source

38th International AUBEA Conference held at University of Auckland, Auckland New Zealand, 2013-11-20 to 2013-11-22, published in: Proceedings of the 38th International AUBEA Conference, pp.95 - 105 (10)

Item Type

Conference Contribution

Publisher

The Australasian Universities Building Education Association (AUBEA)

Publisher's Version

Rights Statement

NOTICE: this is the author’s version of a work that was accepted for publication. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in (see Citation). The original publication is available at (see Publisher's Version).